Citywire for Financial Professionals
Share this page:
Stay connected:

Citywire printed articles sponsored by:

View the article online at

The Friday Five: regulatory moves we're still waiting for

This week the OFT clamped down on airlines charging customers to pay by debit card. Here are some other interventions we're waiting for.


by Victoria Bischoff on Jul 06, 2012 at 12:09

The Friday Five: regulatory moves we're still waiting for

News that airlines will no longer be able to charge customers a ‘surprise’ debit card fee when booking flights online has been hailed as a major victory in the battle against misleading and excessive card surchages.

And it comes thanks to intervention by one of our regulators – the Office of Fair Trading (OFT).

Here are five other regulatory interventions we’re still waiting for, and how they too could help consumers.

1. Ban on excessive fees and charges

Although the OFT’s announcement yesterday is a step in the right direction, what we’re really waiting for is the government to bring in its ban on rip-off card surcharges!

As an early Christmas present last year, the Treasury promised us that by the end of 2012 retailers will no longer be able to charge us excessive fees for paying by card – bringing forward similar European proposals that are not due to come into effect until mid-2014.

Instead, traders will only be allowed to levy a ‘small charge’ to cover the cost of processing a debit or credit card payment. A fairer charge – according to consumer group Which? – would be between 10p and 20p for a debit card payment and no more than 2% of the total value of any credit card transaction, but we're still waiting to find out what the charges will be. At present budget airlines commonly charge as much as £12 per person to pay by card.

The best part is that the ban will not just be confined to the travel industry, it will cover most sectors such as cinemas, hotels, booking agencies and even local councils.

2. Payday loans crackdown

Complaints about the much-maligned payday loan sector more than doubled last year, and after raising concerns that companies are taking advantage of people in financial difficulty the OFT launched an ‘extensive’ investigation earlier this year.

The regulator said it was also concerned that firms were giving out loans without first checking that the borrower could repay them, targeting inappropriate groups of people – like students, for example – and rolling over loans so that charges escalate and loans become unaffordable.

Its findings are due out later this year, and for consumer groups that have long complained that the market is poorly regulated they can’t come soon enough. MPs, meanwhile, have similarly thrown their weight behind the investigation, urging the government to take swift action should it reveal companies aren’t acting appropriately.

Sign in / register to view full article on one page

4 comments so far. Why not have your say?

Graham D-C

Jul 07, 2012 at 09:39

I do not see a problem with charges for use of credit cards to pay for air travel,. Its your choice to do it on line. The travel agent I use always matches the online price and I merely pay £100 to protect me through my credit card company. I then payin cash the balance as the instalments fall due.

Whereas the payday loan is an evil practice and takes advantage of the financially poorest if not desperate and gullible elements in our society.. There are still in the 21st century practices in this country which should have been stampred out years ago by governments enacting laws with stiff penalties for any infringements.

report this

James B. Johnson

Jul 07, 2012 at 15:05

The problem with the use of credit cards is that the charges vastly outweigh the actual cost to the company.

That's the whole point.

It's just another scam

report this

Graham D-C

Jul 07, 2012 at 17:44

The charge for the use of a credit card on £100, is infinitesimal compared to the protection it gives you. I took Barclaycard to a small claims court( as a joint defendant) with the party that sold me a repair protection agreement but failed to repair my microwave combi in a reasonable time. After failing to respond to my claim, at my request the court sent in the bailiffs at Barclays Bank HQ (London) to seize assets equal to my claim. From memory, I got circa £300+. The only mistake I made was not to significantly up my claim after they failed to respond to the court.

On another occasion, I again used Barclaycard for a £100 part payment for a tour in Italy with Page and Moy. Having booked a room in a hotel with a lakeside view in Garda, we found the whole area in front of the hotel and beneath our window was torn up for repairs. I wrote a complaint to the rep on the spot(as required) and got a voucher for £50 for another holiday, which I refused. I then wrote to Barclaycard with photographs and ended up with a cheque for £300 from Page & Moy. I proved that P&M knew before we left England the state of repairs at the hotel.

Later on the same trip, we travelled to St Anton, to stay at the Post Hotel (previously known to us). Lo and behold the new Burghmeister offices were being built, with jack hamers starting at 7.30am. I again complained in writing on the spot,. The pressure was mounting for the Rep. After dinner she came and asked me if I would like to speak to the hotel owner- Herr Albert, initially I declined as it was not his problem, however as it would have been rude to refuse, I did see him. He apologised for the disruptions we had experienced on our holiday adding that whilst Garda was beyond his remit. , he asked how he could help at St Anton. I told him the problem was not his but P & M. He then offered me a free 3 day stay at the hotel at a later date. I said whilst that was very kind of him, travelling all the way from England would hardly be worth it, he then said, " well come for a week" , I accepted. We later travelled out by car and following our stay, enjoyed a further week in a Timeshare hotel north of Bolzano. Those were the days.

I never, buy/book anything over £100 without a credit card.


report this

Rose G

Jul 09, 2012 at 10:40

There has been price fixing amongst the energy suppliers and nothing has or can be done about it. Offgem is as useless as any of the other regulatory bodies because their aim seems to be to keep customers in the dark until some entreprenarial nosy media type decides to go public about some thing or other.

Offgem has no teeth, it is just another body where people get paid to pay lip service rather than tackle what is clearly a monopoly created by the big suppliers, where they can charge what they like - we the customer has very little say in how prices are kept up by competition between the players - competition to keep prices reasonable between them was supposedly the reason for privatising them all, yet this has brought on year by year increases, even when the prices in the international markets are low - we are seldom given the discounts when we should get them, because they keep the profits for themselves - governments have no control over this bad practice, all they can do is make sufficient noise about it one day, and move onto something more exciting the next, so on and so forth.

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

Sponsored By:

Weekly email from The Lolly

Get simple, easy ways to make more from your money. Just enter your email address below

An error occured while subscribing your email. Please try again later.

Thank you for registering for your weekly newsletter from The Lolly.

Keep an eye out for us in your inbox, and please add to your safe senders list so we don't get junked.

Latest from Investment Basics

See all headlines

Sorry, this link is not
quite ready yet